Ahead of GST Council meeting, Finance Ministry on Tuesday assured that sufficient enforcement provisions exist to take action against offshore gaming platforms which do not pay the prescribed GST. Revenue Secretary Sanjay Malhotra had earlier indicated that the action includes banning as well.

Meanwhile, the GST Council will meet on Wednesday to discuss the changes in legislation for levying a uniform 28 per cent GST on online gaming, casinos and horseracing. The meeting is also expected to discuss base value for applicability of GST.

On July 11, during its 50th meeting, the Council recommended an uniform 28 per cent GST on full value for online gaming, casinos and horseracing. It will be applicable on the face value of the chips purchased in case of casinos, on the full value of the bets placed with bookmaker/totalisator in the case of horse racing, and on the full value of the bets placed with online gaming platforms. As of now, there is no indication for review of rate.

On Wednesday, well known cricketer and Rajya Sabha Member from Aam Aadmi Party, Harbhajan Singh, asked whether this decision will have an impact on gamers shifting to offshore platforms. In a written response, Minister of State for Finance, Pankaj Chaudhary, said: “Some representations have been received from stakeholders stating so. Sufficient enforcement provisions exist to take action against offshore platforms which do not pay the prescribed GST.”

There have been apprehensions that foreign platforms will have an edge over domestic platforms as the former is not being regulated here and they can escape the GST. However, in an interview to businessline last month, Revenue Secretary, Sanjay Malhotra, had said when the money goes out, it has to be declared as to what purpose it is going, under the RBI regulations. So, “we will have to work with them to include this (online gaming). We will work out details. Challenges are there but it will be our effort to provide a level playing field to the domestic industry as well,” he said.

He further said that the regulator for online digital content is MeitY (the Ministry of Electronics and Information Technology). Now, “in case of entities which are located abroad, but not following the law of the land, while operating here, we can regulate them. In the worst case, we can even ban them. We can blacklist and block them,” he added.

GST Council Meet

Meanwhile, the Council meeting on Wednesday has a single point agenda of finalising the mechanism for levying 28 per cent GST on online gaming, casinos and horse racing.

“The Council will deliberate and approve the amendment in the GST law in order to implement the decision taken by it in its last meeting to levy GST at the rate of 28 per cent on the face value in online gaming, casinos and horse racing,” a source told businessline. This amendment is required to make all the three actionable claims. Once amendments are approved, a bill is likely to be introduced during the ongoing Monsoon Session of Parliament to implement the recommendations of the GST Council.

Schedule III of the CGST Act, 2017, lists activities or transactions which are treated neither as a supply of goods nor a supply of services. Clause 6 of this schedule mentions “Actionable claims, other than lottery, betting and gambling.”

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